chương 2

If a shortage exists in a market for a good, the price of that good will tend to fall.

• Only in long run

• True

• False

• Cannot be determined

The point of intersection between the supply and demand curves is called the stress point.

• False

• Only in surplus

• Only under monopoly

• True

In the long run, the market price tends to adjust toward the equilibrium point.

• Only with subsidies

• Only in monopoly

• False

• True

Countries that rely on a free market system are plagued by persistent shortages or surpluses of goods and services.

• Only with tariffs

• True

• Only during wars

• False

One of the drawbacks of free markets is that competition in such markets undermines the ability of price to adjust to its equilibrium value in the long run.

• Only with quotas

• True

• False

• Only in oligopoly

In perfect competition, each firm produces a product that is clearly differentiated from the products of other firms in the same market.

• False

• Only with branding

• Only for services

• True

A monopoly occurs when there is a single seller for a product or service.

• Only with patents

• False

• Only in small towns

• True

Economists refer to a market in which a few sellers dominate the supply side as monopolistic competition.

• Only with cartels

• Only in banking

• False

• True

Product differentiation is a key to success in monopolistic competition.

• True

• False

• Only in perfect competition

• Only for commodities

In the United States, laws prohibit the creation of most types of monopolies.

• Only antitrust fails

• True

• False

• Only state laws